Today we are publishing a new strategy for the collection of student loan repayments. This joint repayment strategy sets out how the Department for Business, Innovation and Skills, the Student Loans Company, Her Majesty’s Revenue and Customs and the Devolved Administrations of Wales, Scotland and Northern Ireland will work together to ensure the operation of a fair, robust and efficient student loan repayment system.
The Government is committed to maintaining the UK’s world class education system while living within its means. By lifting the cap on student numbers, we are enabling more people to benefit from higher education than ever before. As more loans are issued to new students each year, it is vital that the repayment process is robust, convenient for borrowers and working efficiently to ensure the sustainability of the student finance system and value for money for the taxpayer. Reviews of the student loan repayments system by the National Audit Office, the Public Accounts Committee and the Business, Innovation and Skills Committee during 2013 and 2014 recommended that the Government take further action to improve the repayment process. This new strategy sets out what the government has done to date to improve the collections process and our approach to improving the student loan repayment system yet further.
The three objectives underpinning the strategy are:
- Strengthened capability to trace borrowers and pursue and recover outstanding student loan debt;
- Enhanced performance management through forecasting of future repayment rates, monitoring and target setting;
- Improved efficiency to drive operational costs down and repayment collection up, while providing a high quality customer service to borrowers.
The vast majority of borrowers meet their repayment obligations. We will do more to support borrowers who seek to meet their loan repayment obligations, and, in the interests of fairness to both the taxpayer and to borrowers that meet their obligations, we will be tougher on those who do not. We will take stronger action to trace borrowers including those overseas, act to recover loan repayments where it is clear that borrowers are seeking to avoid repayment, consider the use of sanctions against borrowers who breach loan repayment terms and, if necessary, prosecute.
This approach is fair for borrowers and good for the effective management of public money, providing value for the taxpayer and helping to ensure that the student finance system remains on a sustainable footing.
We will keep the strategy under review to ensure that the repayment system continues to meet these objectives, and we will report annually on progress.
A copy of the strategy document will be placed in the Libraries of the House.